Yes it is a misunderstanding. I already said that people tend to be irrational about change, didn't I?

Most of those in those threads have only the faintest grasp of the accounting that would drive something like this. And, since they don't, they are making conclusions about what the impact will be that don't necessarily coincide with the incentives DL is responding to.

Newsflash: DL WANTS you to use your miles. They recognize deferred revenue when you do it. This is as good for the top-line as selling you or me a ticket for cash. Yeah, it doesn't bring cash flow, but cash flow isn't often the problem in the airline industry. In short, the seats aren't free, and DL isn't giving them away for nothing. The conventional wisdom on FT doesn't recognize this complexity. Instead, all I ever see is stuff like "they won't give it away if they can sell it" or "they will give it away only if it will go empty, otherwise". But these comments are ignorant of what actually happens in DL's books when a FF ticket is redeemed and, accordingly, are gross oversimplifications.

The trick is to, as much as possible, ensure that the deferred revenue you are recognizing from the mileage redemption matches the revenue that you are giving up by selling the seat for miles. As long as they can do that, I would think that DL will be relatively indifferent as to whether you pay cash or miles for the ticket. The minimum mileage is not likely to offer revenue comparable to selling the ticket during peak periods.

As for the 3-tier chart, again, remember that DL wants to sell the ticket to you. They are simply trying to find a market-clearing price. To do this, they have a few options. They can go for a one-size fits all approach, and offer anytime awards at some price where it is close to revenue-neutral on the highest-demand days. The problem, however, is that this approach runs a real risk of reducing redemptions (=revenue) for many/most days, where something like CO's 250k EasyPass J reward to Europe is simply too high of a price.

DL is incentivized to increase revenues. Just as with paid-for tickets, they can increase the revenue for award tickets by either raising prices or increasing the number of tickets sold. The 3-tier system simply increases the flexibility DL has to adjust both sides of the equation. When the alternative is to charge me worst-case pricing for even marginal dates, I simply see no reason to fear the 3-tier system.

None of the critics has offered a coherent theoretical model for why this is bad, much less actual evidence. They are assigning causality that simply hasn't been proven. Until someone does, then, yes, I am going to assume that it is nothing more than hysteria and fear of change.

At the end of the day, people are confusing poor saver availability during their limited searches and extrapolating this to mean that the 3-tier structure is all some grand conspiracy to dupe people out of miles. I don't ever remember availability to be good. All of the ST carriers have an awful reputation for availability during peak periods. Why do we now need to search for a bogeyman to explain it away? How did we explain it last year?